The Easiest Way to Fund Your Build as a Bricklayer

Construction finance works differently to a standard home loan.

Instead of receiving the full loan amount upfront, funds are released in stages as your build progresses. Lenders tie each payment to specific milestones like slab completion or lock-up, and they'll only charge interest on what's been drawn down so far. For bricklayers building their own place or working with a registered builder, understanding how these progress payments line up with your contract and cash flow makes the difference between a build that runs to plan and one that stalls waiting for funds.

What Construction Finance Actually Covers

Construction finance can cover the cost of land plus the build, or just the build if you already own the block. Most lenders will fund up to 80% of the combined land and construction value without requiring lenders mortgage insurance, though some offer higher ratios depending on your deposit and income stability. The loan amount gets split across a progressive drawdown schedule that matches your building contract's payment milestones. If you're looking at a house and land package, the land component usually settles first, then construction draws follow.

How the Progressive Drawdown Schedule Works

Your lender releases funds at set stages during construction. Typical stages include base or slab, frame, lock-up, fixing, and practical completion. Each stage requires a progress inspection before the lender approves the next payment. The inspection confirms the work matches the stage claimed in your progress payment schedule. You or your builder submit a progress claim, the lender arranges an inspection within a few days, and once approved, funds go to the builder's account. Expect a Progressive Drawing Fee each time a payment is made, usually between two hundred and four hundred dollars per drawdown depending on the lender.

Interest Charges During Construction

During the construction phase, you only pay interest on the amount drawn down so far, not the full loan amount. If your total loan is four hundred thousand but only one hundred and fifty thousand has been released for the slab and frame, interest is calculated on that one hundred and fifty thousand. Most lenders offer interest-only repayment options during construction, which keeps your outgoings lower while the build is underway. Once construction finishes and you reach practical completion, the loan converts to a standard principal and interest home loan for bricklayers with regular repayments based on the full amount.

Fixed Price Contracts vs Cost Plus

Lenders prefer fixed price building contracts because the total cost is locked in from the start. A fixed price contract lists the final build cost, and the progress payment schedule breaks that total into stages. Cost plus contracts, where the builder charges actual costs plus a margin, are harder to finance because the final loan amount isn't certain. If you're going down the cost plus route, expect the lender to require a detailed budget, quantity surveyor's report, and a larger deposit to cover potential cost blowouts. Fixed price contracts also protect you from price increases once construction starts, which matters when material costs shift.

What Lenders Want to See Before Approval

You'll need council approval or a development application that's well progressed, a signed building contract with a registered builder, detailed plans, and evidence you can service the loan once it converts to full repayments. For bricklayers who are self-employed, lenders will ask for two years of tax returns or financials showing consistent income. If you're on the tools for someone else, recent payslips and a letter from your employer confirming ongoing work usually covers it. The lender also wants to see you have enough cash to cover the deposit, any upfront costs like council fees or soil tests, and a buffer for cost overruns or delays.

Owner Builder Finance

If you're planning to act as owner builder and coordinate trades yourself, getting finance is tougher. Most mainstream lenders won't touch owner builder projects because the risk of cost blowouts and construction delays is higher without a registered builder overseeing the job. A few specialist lenders will consider it if you can prove relevant trade experience, have a detailed project plan, and bring a larger deposit, often 20% or more. Even then, expect higher interest rates and stricter drawdown conditions. The lender may require signed contracts with each subcontractor and release payments directly to subbies rather than to you.

Timing: When You Need to Start Building

Most construction loan approvals require you to commence building within a set period from the approval date, usually six to twelve months. If you haven't broken ground by then, the approval lapses and you'll need to reapply. Lenders set this timeframe because property values, interest rates, and your financial situation can all change. Once construction starts, you'll typically have twelve to eighteen months to reach practical completion. If the build runs over that window, you may need to request an extension and provide updated valuations or financials.

Construction Finance for Renovations

Construction loans aren't just for new builds. If you're planning a major renovation, the same progressive drawdown structure applies. The lender values your property as-is, then values it again based on plans for the finished renovation. They'll lend against the improved value, releasing funds in stages as the reno progresses. Renovating your house with construction finance works well when you're adding significant value, like a second storey or full extension, but it's overkill for minor cosmetic updates where a standard home improvement loan or equity release makes more sense.

How to Apply for Construction Finance

Start by getting your building contract, plans, and council approvals in order. Then approach a broker who works with construction lenders regularly. Construction loan applications take longer to assess than standard home loans because the lender needs to review plans, contracts, and the builder's credentials. Allow four to six weeks from application to approval. Once approved, you'll receive a formal loan offer that includes the progressive drawdown schedule, fees, and the construction timeframe. After you accept, the land settles first if it's part of the package, then construction draws begin once the builder is ready to start.

If you're working in the trades and building your own place, or you're stuck trying to line up a construction loan that actually fits how you earn, call one of our team or book an appointment at a time that works for you. We'll step through your building contract, sort out what the lender needs, and get your construction funding lined up before you break ground.

Frequently Asked Questions